Public company
On February 20, 1986, Tyco became a publicly traded company[9] and had $87.7 million in revenue that year.[10][20][8] Tyco revamped its RC brand at this time, teaming with the Japanese company Taiyo to release radio controlled cars with more powerful motors and dynamic suspensions, capable of performing in rugged conditions. They started with five models in the 1986 catalog, including the Turbo Hopper,[21] before filling a full 13 pages with RC cars in 1987. By 1988, 22 pages of the company's catalog were taken up by Tyco R/C toys.[22][23]
In 1987, the company moved away from its trucking line and model train offerings, instead focusing on newer toys.[24] It debuted Tyco Super Dough to compete with Play-Doh. Kenner quickly sued, citing similarities in the two products, but ultimately lost the case.[25] Tyco debuted its Dino-Riders line of dinosaur-based action figures in 1988.[26] A cartoon series was produced to help market the line.[27]
In May 1989, the company purchased the View-Master Ideal Group, Inc., which brought the View-Master line of stereoscopes, Magna Doodle magnetic drawing toys, and Ideal Nursery line of dolls to Tyco.[28] The company finished out the year with $384 million in revenue.[29] Between 1989 and 1991, Tyco teamed with Sega Toys to distribute Pocket Power, a line of pocket-sized toys. A line for girls, called Pocket Pretties, was also developed.[30][31][32]
Tyco's musical toys of the late 1980s and early 1990s included the Tyco Hot Lixx and Tyco Hot Keyz, an electronic guitar[33] and keytar respectively.[34]
After taking the company public, Seltzer was named chairman and maintained control of the board by filling it with family members and loyalists. In the years that followed, the company's stock valuation fell and revenue was impacted by Benson's self-serving investments. He lent money to and made acquisitions from his own companies. In 1988, he used Tyco's money to purchase an underwear company in Puerto Rico in which his family had an interest. Shareholders filed a lawsuit. By 1990, the situation came to a head.[20] Seltzer and his two sons ultimately left the company and sold their remaining stock in July 1991.[11] The news made Tyco's market valuation increase by 11%.[35] President and CEO Richard Grey was then also named chairman.[36]
Starting in the early 1990s, the company expanded internationally with its Tyco International operating unit. It opened wholly owned subsidiaries in the United Kingdom, Spain, France, Germany, Italy, Austria, Switzerland, Mexico, Canada, Belgium, Netherlands, Luxembourg, and Australia.[37] In October 1990, it bought Stanley Cohen's Playtime Toys[38] and turned the business into its direct import subsidiary.
In May 1992, Tyco purchased the Matchbox brand of scale model cars for $106 million. The acquisition helped the company expand in international markets, such as England and Germany.[8][29][39] Tyco also purchased the Illco Toy Company in June, bringing Illco's extensive line of toys based on the children's show Sesame Street to Tyco. It then put a greater emphasis on licensing popular characters from other companies.[11] Later that year, Tyco signed a 10-year licensing agreement with Children's Television Workshop[40] and Illco became the Tyco Preschool subsidiary.[41][42]
In the 1990s, the company also branched out with other toys such as airplanes. Its hit toy of 1990 was a set of small quintuplet dolls, called the Quints, developed by Bernard Loomis. With a growing stable of accessories, it had generated $20 million after 10 months on the market.[45] It made a hit in 1991 with their Disney's Little Mermaid dolls that were released in conjunction with the movie.[46] In 1993, Tyco became the first company to license Looney Tunes characters from Warner Bros.[11] It also created the Power Plug, a third-party accessory that added turbo features and macros to a Sega Genesis or Super Nintendo game controller.[47][48]
After 1993, Tyco exited the model train business.[4] Gary Baughman was brought in as president in October 1994 and restructured the company. Tyco moved away from television and movie-related toy lines, refocusing the company on its classic offerings. The firm raised $96 million in a stock offering to pay down $40 million of debt. However, Tyco remained a distant third behind Mattel and Hasbro, bringing in $709.1 million in 1995. International operations were also consolidated into one central office in Belgium with satellite offices throughout Europe. However, the firm's overseas activity never rose above 25% of total sales.[49] By 1996, Tyco had suffered three years of losses totalling $135.5 million.[50]
Tyco's Sesame Street line increased dramatically in popularity in 1996, when the plush doll Tickle Me Elmo became the most sought-after toy of the Christmas season.[51] The toy was released that July, with the company expecting to sell around 400,000 units. By December, Tyco had its four factories in China scrambling to produce 1 million units before Christmas.[52]
